Here it is folks, the big gaming acquisition people have been talking about. Formally announcing the deal, mega game publisher Activision Blizzard has acquired Candy Crush maker King Digital Entertainment — well — for a whopping $5.9 Billion — making it perhaps one of the biggest acquisitions in the gaming domain.
I am not a Candy Crush player and frankly, I am not even aware of what other Mobile games King Digital has made or plans of building, but looking at the amount Activision has decided to shell off, mobile and gaming is probably “the hot combination” these days.
Here’s what Activision had to say:
On November 2, 2015, Activision Blizzard, Inc. and King Digital Entertainment plc announced the signing of a definitive agreement under which ABS Partners C.V., a wholly owned subsidiary of Activision Blizzard, will acquire all of the outstanding shares of King for $18.00 in cash per share, for a total equity value of $5.9 billion.
Activision Blizzard believes that the addition of King’s highly-complementary business will position Activision Blizzard as a global leader in interactive entertainment across mobile, console and PC platforms, and positions the company for future growth. The combined company will have a world-class interactive entertainment portfolio of top-performing franchises.
Call of duty and similar titles for consoles like Xbox and PlayStation make up majority of revenues for Activision, thus many have obviously questioned the viability of such an acquisition. However, this is what Activision Blizzard CEO, Bobby Kotick sold to investors and all those who are skeptic of this deal :
The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.
So you a candy crush player ? Well since you are reading this, you’d probably know that the game is now a property of someone else, but bleh ! who cares !
The Financials
With this deal, the new combined entity will have a massive 500 Million monthly active users across almost 200 countries and is expected to boost Activision’s adjusted earnings by around 30 per cent next year.
As for the transaction price, the $5.9 Billion deal is an all-cash transaction and represents a 26 per cent premium to King’s $4.7 Billion market capitalisation as of Monday’s close, an $18 share price. Interestingly though, this is significantly lower than the $22.5 share price King Digital debuted its IPO at in 2014.
